Sean Meadows Sentenced to 25 Years for Defrauding Investors of More Than $13 Million
United States Attorney Andrew M. Luger today announced the sentence of SEAN MEADOWS, 42, to 25 years in federal prison for using his financial planning and asset management firm, Meadows Financial Group (MFG), to operate a long-term Ponzi scheme in which he stole more than $13 million from at least 100 individual victims. MEADOWS was indicted on August 5, 2014, and pleaded guilty on December 11, 2014. He was sentenced today before United States District Court Judge Susan Richard Nelson.
“Sean Meadows systematically destroyed the financial security of more than one hundred working and middle class people, leaving them with no possibility of recovery,” said U.S. Attorney Luger. “Over the past year we have charged more than a dozen individuals for conducting investment fraud schemes that resulted in the loss of tens of millions of dollars from hundreds of victims. Like Meadows, many of these criminals preyed on the most vulnerable victims—working-class retirees seeking to make a little more out of their golden years. It is a priority of my office to put a stop to this kind of malicious financial exploitation. Working together with excellent investigators at the Minnesota Department of Commerce Fraud Bureau, IRS-CID, United States Postal Inspection Service, SEC and FBI, we are focused on catching these types of cases at the earliest stages to prevent the kind of financial catastrophe that Sean Meadows caused to the victims in this case.”
“Sean Meadows pretended to be a trusted investment adviser, but he abused that trust by lying to and stealing from his clients,” said Minnesota Commerce Commissioner Mike Rothman. “Instead of investing his clients’ hard-earned retirement savings, he used their money to bankroll his own extravagant lifestyle. Meadows not only robbed his victims of their lifetime savings. He also robbed them of their peace of mind and their dreams of a secure retirement. The Commerce Department Fraud Bureau put a stop to his crimes and worked closely with federal authorities to bring Meadows to justice.”
“Illegal activity involving the investment industry has brought financial ruin to many Americans” said Special Agent in Charge Shea Jones of the IRS Criminal Investigation St. Paul Field Office. “Today’s sentencing of Mr. Meadows reinforces our commitment to identify and prosecute those who prey upon honest, hard-working taxpayers that have taken what has belonged to others for their own personal financial gain.”
According to the defendant’s guilty plea and documents filed in court, MEADOWS operated MFG, through which he sold insurance and investment products to clients in Minnesota, Indiana, Arizona, and elsewhere. From 2007 until April 2014, MEADOWS successfully solicited a total of at least $13 million from more than 100 clients for a purported investment managed by MFG. The defendant falsely told victims that he would use their funds to purchase bonds, real estate, or other legitimate third-party investments.
According to the defendant’s guilty plea and documents filed in court, MEADOWS lured victims into removing funds from their retirement and other savings accounts by promising high rates of returns—up to 10 percent annually—when, in fact, he did not invest their funds and did not have a legitimate means by which to make interest payments. Instead, MEADOWS used funds from new investors to make interest and/or principal repayments to existing investors. For example, as charged in the indictment, on September 26, 2013, MEADOWS made a payment of more than $500,000 to one victim, purportedly paying off a successful investment with MFG. In fact, the payment was actually comprised of newly invested funds from other victims.
According to the defendant’s guilty plea and documents filed in court, MEADOWS used the illicit proceeds of the Ponzi scheme to pay personal expenses, including: making “salary” payments to himself; making payments to his spouse; paying expenses on personal investment properties; paying personal credit card bills; purchasing a vehicle for himself; traveling to Las Vegas; gambling at various casinos and online; and spending more than $135,000 at adult entertainment establishments in Minnesota and Las Vegas.
Among the victims MEADOWS defrauded are senior citizens and the disabled, poor or terminally ill. Victims were left in financial ruin because they lost their financial security, retirement funds, their ability to support their families, and in some cases, their ability to pay for cancer treatments.
According to documents filed in court, as just one example, one 66-year-old victim identified in court papers as “Victim 1,” had approximately $200,000 saved in a MetLife annuity when she met the defendant. MEADOWS convinced her to entrust him with the annuity to invest. In November 2013, Victim 1 was diagnosed with lung cancer and was told she only had 18 months to live. When she asked the defendant to surrender her investment so she could travel, enjoy her remaining time and divide her money amongst her family, Meadows convinced her to instead move most of the money to a high interest bond that was “very liquid.” She wrote a check to MFG for $215,000. An Allianz internal investigator soon called her and asked if she was aware of the surrender penalties she would have to pay. The victim called MEADOWS, who told her to “relax” and avoided her questions by first saying he was recovering from knee surgery and later that he was on vacation in Arizona. Victim 1 asked the defendant for $20,000 to cover her credit card debt, which he claimed he would provide, but the money never arrived. MEADOWS left Victim 1 without the funds to travel, without the funds to seek advanced treatment for cancer and with no money to leave to her family.
This case is the result of an investigation conducted by the Minnesota Department of Commerce, Securities and Exchange Commission, the United States Postal Inspection Service, the Internal Revenue Service—Criminal Investigation, and the FBI.
This case was prosecuted by Assistant U.S. Attorneys Benjamin F. Langner and Melinda A. Williams.
- SEAN MEADOWS, 42
- Eden Prairie, Minn.
- Wire Fraud, 7 counts
- Mail Fraud, 3 counts
- Transaction Involving Fraud Proceeds, 1 count
- 25 years in prison
- 3 years’ supervised release